guess? inc (GES) Details

Guess? Inc. engages in the design, marketing, distribution, and licensing of apparel and accessories for men, women, and children. Products include denim and cotton clothing, such as jeans, pants, overalls, skirts, dresses, shorts, blouses, shirts, jackets, and collections of knitwear. The company also grants licenses to manufacture and distribute various products, including eyewear, watches, handbags, kids’ and infants’ apparel, leather goods, fragrance, jewelry, and other fashion accessories. As of Dec. 31, 2006, the company operated 336 stores, including 192 full-price retail stores, 103 factory outlet stores, 25 marciano stores, and 16 Guess Accessories stores in the U.S. and Canada. It also ran 24 stores in Europe and 3 in Mexico through a majority-owned joint venture as of yearend 2006. The company was founded in 1981 and is based in Los Angeles.

guess? inc (GES) Key Developments

On July 7, 2015, Guess? Inc. entered into an Executive Employment Agreement with Victor Herrero Amigo that provides for Mr. Herrero to transition to becoming the company's Chief Executive Officer effective as of August 1, 2015. Mr. Herrero's first day of employment with the company was July 7, 2015, at which time Mr. Herrero became an Executive Vice President of the company. On the Transition Date, Mr. Herrero will become the company's Chief Executive Officer and Paul Marciano, the company's current Chief Executive Officer and Vice Chairman of the Board of Directors, will assume the role of Executive Chairman and Chief Creative Officer of the company. The Board also appointed Mr. Herrero to the company's Board of Directors effective upon the Transition Date. Maurice Marciano, the company's current non-executive Chairman of the Board of Directors, will become Chairman Emeritus on the Transition Date and will continue as a member of the Board of Directors. Prior to joining the Company, Mr. Herrero, age 46, held several positions with Inditex Group.

Guess?, Inc. (the Company") entered into a Loan, Guaranty and Security Agreement by and among the Company, Guess? Retail, Inc., Guess.com, Inc. (collectively, the U.S. Borrowers"), Guess? Canada Corporation (Canadian Borrower"; and together with the U.S. Borrowers, the Borrowers"), the guarantors party thereto, the financial institutions from time-to-time party thereto as lenders, and Bank of America, N.A., as agent for the lenders (Agent"). The Loan Agreement provides a senior secured asset-based revolving credit facility that has a maturity date of June 23, 2020 and replaces the Company's existing credit facility. At closing, there were no direct borrowings and approximately $1.7 million of letters of credit outstanding under the facility. The Loan Agreement provides for borrowing capacity in an amount up to $150 million, including a Canadian sub-facility up to $50 million, and a borrowing base that is computed quarterly, monthly or weekly, as applicable, and is composed of the Borrowers' accounts receivable, inventory and eligible cash, subject to certain reserves. Under the Loan Agreement, the Borrowers have an option to expand the revolving credit facility by up to $150 million in the aggregate subject to the terms and conditions of the Loan Agreement, including the willingness of existing or new lenders to assume such increased amount. The revolving credit facility includes a $35 million sublimit for U.S. letters of credit and a $15 million sublimit for Canadian letters of credit and also includes a U.S. swingline subfacility of up to $10 million and a Canadian swingline subfacility of up to $5 million. The Borrowers may voluntarily reduce or terminate the revolver commitments and prepay outstanding loans under the Loan Agreement, in whole or in part, at any time, subject to customary administrative provisions. The revolving credit facility may be used for working capital and other general corporate purposes. The revolving credit facility bears interest based on the daily balance outstanding, for loans to the U.S. Borrowers, at the U.S. base rate plus an applicable margin (varying from 0.25% to 0.75%) or at LIBOR plus an applicable margin (varying from 1.25% to 1.75%) or, for loans to the Canadian Borrower, at the Canadian prime rate plus an applicable margin (varying from 0.25% to 0.75%) or at the Canadian BA rate plus an applicable margin (varying from 1.25% to 1.75%). The applicable margins are calculated quarterly and vary based on the average daily availability of the aggregate borrowing base as set in the Loan Agreement. The U.S. base rate is based on the greater of (i) the U.S. prime rate, (ii) the federal funds rate, plus 0.50%, and (iii) LIBOR for a 30 day interest period, plus 1.0%; and the Canadian prime rate is based on the greater of (i) the Canadian prime rate, (ii) the Bank of Canada overnight rate, plus 0.50%, and (iii) the Canadian BA rate for a one month interest period, plus 1.0%. The revolving credit facility also carries a commitment fee equal to the available but unused borrowing at 0.25% per annum. The obligations under the Loan Agreement are guaranteed by the Company and the Company's existing and future domestic and Canadian subsidiaries, subject to certain exceptions, and such obligations are secured by a first priority lien on substantially all of the assets of the Borrowers and the guarantors, as applicable. The terms of the Loan Agreement require the Company to maintain a consolidated fixed charge coverage ratio of 1.0:1.0 on a trailing four-quarter basis if a default or an event of default occurs under the Loan Agreement or availability under the Loan Agreement falls below the greater of 10% of the aggregate borrowing base and $12.5 million. The Loan Agreement also includes customary representations and warranties, affirmative and negative covenants and events of default.

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